Chinese enterprises stimulated to “go out”

In the two-day’s Asian Financial Forum (AFF) in Hong Kong, business leaders and experts from China and overseas gathered on Tuesday to discuss the trends and strategies of Chinese enterprises overseas investment and financing, sharing insights and experiences to promote outward investment and to seek the opportunities and prospects for Chinese enterprises to invest in Hong Kong or through Hong Kong to go global. According to the latest data, China's outbound investment reached 116 billion U.S. dollars in 2014, an increase of 15.5 percent from a year earlier. China has become a net capital exporter with outbound direct investment outnumbering foreign direct investment in 2014. It is an accelerated trend for outbound investment from China.

In the workshop held by All-China Federation of Industry & commerce, Chan King-Wai, the associate director of Committee of Economic Affairs of CPPCC and vice chairman of All-China Federation of Industry & Commerce, addressed that the “belt and road” initiatives bring the historical opportunities for Chinese enterprises to invest overseas to take the policy revenue for a decade. It would accelerate the expanding progress of “going out” for Chinese capitals. Mr. Chan indicated that the “belt and road” initiatives not only accelerate the sustainable development of Chinese economy, but satisfy the demand from relative economies. It brings the new opportunities to complement each other's advantages and enhance the openness of relative nationals. Under this encouraging background, the business environment would be improved, especially for private-owned enterprises in China. It would stimulate the efficiency of utilizing resources and develop both domestic market and overseas market, which enhance the room for development for internalization of private-owned enterprises.

The accelerating trend of Chinese outbound investment is the response under the ‘new normal’ economic status, and requirement of investors from domestic market for further development, according to Vaughn Barber, the partner of KPMG. Mr. Vaughn also indicated that the “going out” tendency upgrades to a new stage, while investment in both the scales and industries are rapidly expanded including private-owned enterprises. He suggested that Chinese enterprises should keep the openness attitude toward expansion to overseas markets, implement a flexible investment strategy. For those not famous in the international market and lacking business experiences in developed countries, it would be better to cooperate with advanced partners or invest as a financial partner to reduce risk.

Zhao You, the president of Fu Wah International Group which invested successfully in hotel industry in New Zealand, emphasized that those outbound investors should focus on the business that they are familiar with and do sufficient study on political, commercial, cultural environment of the target country.

To help Chinese investors “going out”, Hong Kong can play important role in information sharing, financing and human resources. Mr Raymond Yip, the deputy executive director of Hong Kong Trade Development Cuoncil, manifested that Hong Kong could play as the gateway for mainland enterprises to invest overseas. Hong Kong is the international trade hub and financial center with thorough legal system, sufficient liquidity in capital market, comprehensive service that could facilitate cooperation and communication between mainland outbound investors and overseas partners.

In term of financial arrangement for outbound investors, Tse Yung Hoi, the chairman of BOCI-Prudential Asset Management Limited, stated that investors should comprehensively prepare its financial arrangement for outbound investment to eliminate relative risks. He indicated that domestic financial institutes should improve their service to facilitate the outbound investors through Hong Kong. Hong Kong could provide high-standard financial service and help investors with various arrangements such as share exchange, PE investment and venture investment, so as to increase flexibility and efficiency for for international merging and acquisition.

AFF 2015 concluded on Tuesday. The two-day forum, which focused on the theme of "Asia: Sustainable Development in a World of Change," highlighted different sections of speeches, dialogues and thematic workshops. Over 2,400 participants, including global leaders in government, finance and business, took part in AFF 2015 to exchange insights and explore business opportunities.